Pharma outsourcer Recipharm has acquired a Portuguese contract drug developer for €112.3 million ($140 million) in cash and stock, bolstering its global scale and further consolidating the world of R&D service providers.
For its money, Recipharm gets the Lisbon-headquartered Lusomedicamenta Sociedade Técnica Farmacêutica, a contract development and manufacturing organization (CDMO) that grossed €50.7 million ($63.4 million) in revenue last year. Recipharm is putting up €67.1 million ($83.9 million) in cash, offering 3.5 million of its shares to make up the difference and promising €1.3 million ($1.6 million) more if Lusomedicamenta meets its 2014 revenue goals.
Recipharm, based in Stockholm, believes the acquisition will increase its sales by 20% a year, owing to the limited client overlap between the companies. Lusomedicamenta's principal focus is on the development and manufacture of solid, liquid and semi-solid dose forms.
|Recipharm CEO Thomas Eldered|
"The acquisition of Lusomedicamenta ... is perfectly in line with our strategic plan to access new markets, establish new customer relationships and consolidate the industry to become a major CDMO," Recipharm CEO Thomas Eldered said in a statement. "The new customer base combined with significant IP-backed sales in Portugal provides us with many new exciting opportunities."
Lusomedicamenta spells Recipharm's second acquisition since it went public earlier this year, following its $164.5 million August buyout of Italy's Corvette Pharmaceutical Services, a drug manufacturer with annual revenues around €57.7 million ($77 million).
The deal follows a wave of consolidation in the CDMO business, headlined by the $2.6 billion agreement that merged Patheon and DSM into the conglomerate DPx, which in September acquired biologics manufacturer Gallus BioPharmaceutials for an undisclosed sum. AMRI ($AMRI), another CDMO, spent more than $150 million on M&A this year to expand its capacity.
- read the announcement